Ramesh (Sunny) Balwani, the jilted lover and business partner of former Theranos chief executive officer Elizabeth Holmes, finally has his chance to defend himself against charges that he was Ms. Holmes’s accomplice in a Silicon Valley scam involving a ballyhooed blood-testing technology that flopped.
Opening statements in Mr. Balwani’s trial are scheduled Wednesday in the same San Jose, Calif., courtroom where a jury found Ms. Holmes guilty of investor fraud and conspiracy in January. She was acquitted on other counts accusing her of duping patients who relied on Theranos’s flawed blood tests.
Mr. Balwani 57, has denied the charges facing him.
Ms. Holmes, 38, is free on US$500,000 bail while awaiting her sentencing in September. That has stirred speculation that she might agree to testify against Mr. Balwani if prosecutors agree to recommend leniency in exchange for her co-operation. She is facing up to 20 years in prison.
“It leaves the door open” for Ms. Holmes to strike a deal, said Ann Kim, a Los Angeles lawyer who formerly handled fraud cases for the U.S. Attorney’s Office and Securities and Exchange Commission.
There has been no indication so far that Ms. Holmes will testify in Mr. Balwani’s case. Even if Ms. Holmes doesn’t take the stand, her spectre is likely to loom large throughout Mr. Balwani’s trial, which is expected to run through mid-June.
Mr. Balwani emerged as a key figure during Ms. Holmes’s trial – only partly because she accused him of subjecting her to a pattern of emotional and sexual abuse that, she implied, may have affected her actions at Theranos.
The abuse allegations, which Mr. Balwani’s lawyer has vehemently denied, were one reason that U.S. District Judge Edward Davila ruled Ms. Holmes and Mr. Balwani should have separate trials even though they faced the same criminal charges.
Other evidence presented during her trial described a couple bonded in both a secret romance and shared ambition to build a company that they promised would revolutionize health care.
Mr. Balwani, a tech executive who reaped a US$40-million windfall during the dot-com boom of the late 1990s, became involved with Ms. Holmes around the same time she dropped out of Stanford University in 2003 to start Theranos at the age of 19.
Mr. Balwani didn’t initially play a direct role in Theranos, although Ms. Holmes testified he tried to sculpt Ms. Holmes into a more savvy entrepreneur while dictating her diet, daily schedule and friendships. Mr. Balwani joined Theranos in 2009 as the company’s chief operating officer, a position he held until Ms. Holmes ousted him in 2016 amid revelations of rampant inaccuracies with Theranos’s blood tests.
Before Ms. Holmes dumped him, Mr. Balwani played an integral role in the company that included overseeing Theranos’s labs. Meanwhile, Ms. Holmes focused on raising nearly US$1-billion from investors and appearing in flattering media stories celebrating her whirlwind success in male-dominated Silicon Valley.
Ms. Holmes’s fortune was estimated at US$4.5-billion in 2014 while Theranos was working on “wellness centres” in Walgreens stores that were supposed to scan for hundreds of potential health issues with a few drops of blood taken with a finger prick.
While Ms. Holmes got the glory, Mr. Balwani seemed to envision himself as a mastermind, based on evidence presented at the trial. “I have moulded you,” Mr. Balwani told Ms. Holmes in a May, 2015, text that became part of the evidence in her trial.
The texting exchanges between Mr. Balwani and Ms. Holmes – many of which included expressions of their love for each other – are expected to come up again during Mr. Balwani’s trial, along with much of the other evidence submitted during Ms. Holmes’s proceedings.
Having his trial follow Ms. Holmes’s could both hurt and help Mr. Balwani, Ms. Kim said. On the one hand, prosecutors now have a better idea of what types of evidence resonate with a jury. But Ms. Kim says she also believes Mr. Balwani’s lawyers may have a better chance to poke holes in the testimony of the prosecution’s witnesses if they deviate from statements during Ms. Holmes’s trial.
Mr. Balwani’s chances ultimately could hinge on how effectively his lawyers can draw a line distancing him from Ms. Holmes’s actions – a task that could prove difficult if texts such as this one resurface during his trial.
“This business cannot be built by either you or I alone,” Mr. Balwani wrote to Ms. Holmes in a May, 2012, text submitted as evidence during her trial. “That’s why the universe brought us together (among other billion reasons).”
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